The Skillery is a Nashville coworking space with resources and programming for freelancers, entrepreneurs, small teams and independent professionals, all aimed at making work meaningful, satisfying and unabashedly fun.

Roughly once a week, someone emails us asking for advice about adding classes and workshops to their coworking space. We can understand the impulse to do so. If done well, classes can be an fun and profitable side to the bread-and-butter revenue from coworking memberships.

We’ve been running classes and workshops at The Skillery since December 2011. In our earliest days,that was what we did — our only offering, and our only revenue stream. And for a full 2 1/2 years prior to opening ourNashville coworking space, we hosted them in all kinds of places — we did bookbinding classes in a hair salon, web programming classes in an art gallery, cloth diapering workshops in the basement of a public library, and on and on.

Total Number of Classes Offered at The Skillery, 2011-2015

Includes both free and paid classes and workshops. Excludes CO.STARTERS.

These classes solidified our desire to open a physical space — a base of operations where we could host our own events, including classes and workshops. Of course, since most of our classes were going to take place during the evening, it made sense for us to make use of the space during the day. Thus, the idea for our coworking space was born.

Our trajectory may be relatively unique in the coworking-space world, but along the way, we learned a lot about classes and workshops and coworking, and how, where and why they intersect.

A caveat: Somewhat recently, we (mostly) exited the class and workshop business. For us, it had become untenable. But if you’re feeling inspired to host classes and workshops in your coworking space (and there are plenty of good reasons to do so, in spite of our decision), we hope you'll benefit from digging into some of the lessons we’ve learned, along with data and anecdotes from our four years in the class and workshop business.

A few thoughts and tips:

KNOW WHY YOU WANT TO OFFER CLASSES

A key question to ask yourself: Why are you interested in offering classes? Typically, the folks who ask us about our experience are considering offering classes and workshops for one or more of the following reasons:

Classes are a marketing opportunity.

Creating a schedule of events — including classes and workshops — gives us something fresh to talk about on a regular basis, and allows us to reach new and repeat audiences with updated offerings. Even if no one came to any of our classes, we’d still benefit from being able to talk about them in the first place, particularly if we're partnering with other local entrepreneurs/professionals who'll talk and share too.

Classes build community.

We spent 2 1/2 years building a community around The Skillery before opening our coworking space. We couldn’t have grown it without our classes, and we wouldn't have gotten the doors open at our space without that community. If community (as a buzzword) bothers you, feel free to think in more casual terms: Classes build friendships, relationships, connections… And this truly isn't just theoretical — we’ve seen deep friendships blossom and business relationships emerge from connections made in classes we’ve offered.

Classes make us unique.

Chances are, most of the coworking spaces in your area don’t offer classes and workshops, and you’re thinking that offering classes and workshops may help you stand out. You’re probably right. Just make sure that it’s a differentiation that matters. The folks who may be interested in your classes and workshops may want nothing to do with your coworking space. You may be speaking to two entirely different audiences, and marketing to one audience is tricky and time-consuming enough for a small business. Tying these efforts together may be a differentiator that doesn’t make a difference in the way you’re hoping it does.

Classes will bring potential coworking members in the door.

We haven’t found this to be the case. Folks who come to our classes and workshops rarely become members. Yes, it happens, but not predictably, and not often enough to count.

It’s a value-add for our coworking members.

Again, this isn’t reality for us. Our members rarely attend classes and workshops, even though we offer our members a small discount on registration. For us, classes and workshops speak to an entirely different audience.

Classes will bring us extra revenue.

Maybe. Truth is, classes and workshops are a tough revenue generator, especially if they’re not your main gig. We’ve been running classes and workshops for almost four years, and we’ve seen a gross profit of just over $142,000. That’s our gross profit from registration fees minus credit card processing and ticketing fees. From that amount, we still have to pay teachers, pay for a venue (before we had our coworking space), market those classes, pay our staff, etc. The net? After almost four years? $46,797. That’s TOTAL for those four years. You can see why we’ve added additional revenue streams over the years, including our coworking space, which provides steady, recurring revenue.

The Skillery: Class Revenue, 2011-2015

For the sake of this chart, we define "gross profit" as class registration revenue, minus credit card processing and ticketing fees. We define "profit" as gross profit minus teacher payments and other miscellaneous expenses.

BEAR IN MIND THAT FREE CLASSES ARE POPULAR (BUT POORLY ATTENDED)

Our free classes get a much higher registration rate (62%) than our paid classes (40%). We don’t track attendance at our classes, but our basic observations: Paid classes are attended at a rate approaching 100% (not 100% — surprisingly common: some people pay, and never show up); and free classes are usually attended at a rate of around 50%. The latter, in our experience, has been on a downward trend, too, and we can understand why: Our busy lives are only getting busier, and it’s easy to bail on an event when you have no skin in the game.

Free Class Registration, 2011-2015

Based on 1,722 registrations, out of 2,735 spots available, to classes and workshops with a registration fee of $0.

Paid Class Registration, 2011-2015

Based on 2,884 registrations, out of 7,251 spots available, to classes and workshops with a registration fee greater than $0.

There's nothing wrong with free classes, but pay attention to the effort you’re putting forth and how it correlates to your return on that investment. Moving forward, we’ll offer fewer and fewer free classes and workshops at The Skillery, and, instead, we’ll charge a nominal amount for things that were previously free. Not because we want the money, but because we want the engagement. We want people to show up and to engage, and they’re more likely to do that when they’ve paid something, no matter how small.

FOCUS ON ENGAGEMENT, NOT NUMBERS

When people register and don’t show up for a class, it’s a real drag. It zaps our team’s energy, surprises and disappoints our teacher, and ties up valuable resources (our space, our time) without providing much return on investment.

However, small numbers aren't inherently bad. We’ve held valuable and informative classes with a student roster of just two or three, and they've been a delight for us, the teacher and, we think, the students. The folks who registered for those classes showed up, were engaged, and benefited from a favorable teacher-to-student ratio. Small classes can be a great opportunity for teachers to make a valuable connection and establish meaningful relationships with attendees.

Just make sure your teacher knows what to expect, and is OK with a small turnout. As long as everyone is in the right mindset, and the focus is on engaging the folks who do attend, the class can still feel like a giant success.

ASK BUSINESS OWNERS TO TEACH

In the early days of The Skillery, we assumed that teacher recruitment would be hard. How would we find teachers? How would we get them to teach with us? What’s in it for them? We assumed that process would be a big part of the business, but, in fact, as the word spread about The Skillery, teachers started approaching us, wanting to teach classes and workshops across a broad spectrum of subjects. They still do.

The small business owners that consider teaching with us do so because they view it as a marketing opportunity. It’s an opportunity to make money, yes, but more than anything, it’s a chance to position themselves as an expert in a particular field. It’s also an opportunity for some cross-promotion with us. A win/win.

REMEMBER: YOUR REPUTATION IS ON THE LINE, ALWAYS

When someone teaches a class at The Skillery, we’re careful with our language. It's “John Smith’s Intro to Photography class at The Skillery.” We may be hosting it, or promoting it, or handling registration, but it’s John’s class, right?

Wrong. It is our class. Our reputation. Our brand. Always. When we invite others to offer classes and workshops in our space, or ask others to visit our website to register, we are tying ourselves to the class, the teacher, and every component of the attendees’ experience. From the ease of registration, to the pre- and post-class communication, to the temperature in the room, it’s our neck on the line. If the teacher doesn’t order enough supplies for everyone in the room, we’re the ones fielding complaints and issuing refunds the next day. (Yup, that’s happened.)

The other side, however, is just as true. We’ve had people rave about The Skillery because of the overwhelmingly positive experience they had in a class — an experience that, ultimately, we didn’t have much role in creating. The Skillery has benefited from the awesome halo effect of working with creative geniuses, and, if you choose your partners wisely, so can you. Just remember that that by working with others from outside your organization, you are inherently tying your brand to them, for better or for worse.

EXPECT CLASSES TO GET CANCELLED

Best-laid class plans still fall apart, all the time — because of low attendance, weather, illness, because you forgot to account for a road closure in the neighborhood, or the teacher’s girlfriend dumped him. All of these things (and many more) have happened to us. They will happen to you, too. It’s just part of the deal. Don’t count your revenue until the class is complete, expenses have been paid, and no one has asked for a refund.

BEWARE THE REVENUE SHARE

Our first class cost $28 and we sold 14 tickets. We gave the teacher 100% of the revenue from registration. We didn’t make a dime. It was an experiment to see if we could sell any tickets at all, and it worked. Feedback was great, and we made a decision to put more classes on our schedule.

Obviously, that model wasn’t sustainable. A few weeks in, we began arranging to split revenue with teachers, first taking 10%, then 20%, then settling on 25% for well over a year. We eventually bumped that to a straight 50/50 split. For every dollar that comes in, our teachers take home 50%. We cover credit card processing, registration and marketing, and often, hosting. Our teachers cover supplies and venue rental expenses (if any). That’s worked pretty well for us, and most of our teachers seem content with the arrangement.

Median Ticket Price, Paid Classes, 2011-2015

Our median ticket price crept up over the years, alongside an increase in the percentage we took from each ticket sale. The median ticket price in 2015 is being skewed by a smaller number of classes, several of which were our higher-priced Introduction to Entrepreneurship workshops.

It feels like a good plan, because our incentives are aligned. We and the teacher are equally motivated to sell tickets. The more we sell, the more we both make. So we’re both motivated to market the workshop.

The reality, however, is that most teachers expect that we will do the bulk of the marketing for them. Either that, or they don’t have the reach and exposure to bring attendees to the class. We end up carrying the bulk of the responsibility for marketing the workshop. We end up more invested in selling the workshop. We end up investing time and money before the workshop takes place, even if the workshop never ends up taking place due to low registration numbers. We’ve been burned quite a bit.

A better plan, we’ve learned, is to charge a flat amount to the teacher. For $X (usually less than we could potentially earn on a 50/50 split), we allow them to use our space for a class, and, sometimes, we put it on our website and handle registration. (Other times, we remain hands-off and serve explicitly as space providers.) This arrangement works better for all involved. For the teacher, it becomes a fixed expense. For us, it’s guaranteed revenue (albeit, less revenue). We still promote the class — that’s important to us, as part of our mission — but our success isn’t tied to the number of people who come in the door. Again, it’s another way to take the focus off of the numbers and to ensure that the return on investment, however small, aligns with the effort we’re putting forth.

We've also invested in the flip side: creating educational offerings, and bringing them elsewhere. If you wanted to host entrepreneurial workshops at your space, but don't have the expertise, time or money to invest in developing programming, The Skillery's now set up to help — we've begun licensing our one-day Introduction to Entrepreneurship workshops to other spaces, and I'm gearing up to start teaching these workshops in other spaces and other cities, too. (If that's something you're interested in, feel free to drop me a line.)

For us, this is another way to share our experience and expertise, further explore our passion for education and entrepreneurship, and, ultimately, broaden how we bring in revenue, too.

LISTEN TO YOUR CITY

Nashville has changed quite a bit since we launched in 2011. For one, we've seen a significant increase in competition — we estimate that almost a dozen organizations have popped up offering classes and workshops since The Skillery came into being. Then there's our city's population boom (10% over the last five years, which is crazy high), which has resulted in an incredible amount of noise — an increase in the number of things to do, and the number of organizations vying for attention.

On any given night in Nashville, the number of things to do far outweighs the number of people interested in doing them. It’s harder to get someone’s attention. Competition for attention in Nashville is fierce, competition for free time even more so.

Nashville may be experiencing a unique growth spurt, but the point is more broad: Listen to your city. You may be excited to offer classes and workshops, but your city may not meet you halfway. And as your city changes over the years (and it will change, if not as drastically as Nashville has), be mindful of how your class programming needs to change, as well.

YOUR BIGGEST COMPETITOR IS APATHY

We like to joke that our biggest competitor is Netflix. But really, anything that might prevent someone from getting off the couch — even after they’ve registered — is your competition. Hulu. iPhones. Long commutes. All of these things are vying for your attendees’ free time, and you’ll be fighting them all.

To be clear, we’re huge fans of classes and workshops. Education is at the heart of what we do, and we’ll continue to offer certain types of educational programming in the future. But, for those of you who may be exploring the possibility of adding this element, we think it's crucial to go in with open eyes, and a full understanding of both the benefits and hurdles.

What's been your experience with classes and workshops? Find any of this helpful? We'd love to hear your thoughts, too.

Matt Dudley is a dad, husband, educator and entrepreneur. He is the founder and CEO of The Skillery, where he helps build communities of people who do great work. Reach out and say hello.Twitter: @mattdudleyTNMedium: @mattdudleyLinkedin: @matt-dudley

The curriculum for Introduction to Entrepreneurship was developed by The Skillery, and is available to organizations worldwide seeking to offer business education and community support to aspiring entrepreneurs.